The Link Administration Holdings Ltd (ASX: LNK) share price is having a difficult time on Thursday.
In morning trade, the administration services companyâs shares are down over 10% to $3.02.
Why is the Link share price tumbling?
Investors have been selling down the Link share price this morning after the company released an update on a takeover approach.
Early in October, Link received a conditional, non-binding and indicative proposal from Dye & Durham Corporation (D&D) to acquire its Corporate Markets business and all of the BCM business for a total cash consideration of $1.27 billion on a cash and debt free basis.
According to todayâs update, despite engaging with D&D over a period of over two months (compared to D&Dâs proposed 10 business days), the conditional non-binding proposal has not been able to be progressed to a transaction that is certain, has committed financing, reflects appropriate value, and is on appropriate terms.
The release notes that the latest form of the conditional non-binding proposal from D&D involved a material portion of the consideration being deferred and payable after a two-year period. D&D also proposed a change in the mix of businesses being acquired.
In light of this, the company has ceased discussions with D&D and no binding transaction has resulted.
Trading update
Failing to stop the Link share price from sinking today has been the release of a trading update.
That trading update reveals that Link is trading in line with expectations and is forecasting low single digit revenue growth in FY 2023, with operating EBITDA growth of 8% to 10%.
For the first half of FY 2023, Link expects operating EBIT to be in the $75 million to $80 million range, which is run-rating in line with FY 2023 guidance.
The post Why is the Link share price crashing 10% on Thursday? appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Link Administration. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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